The numbers: The New York Fed’s Empire State business-conditions index, a gauge of manufacturing activity in the state, fell 18.5 points in March to negative 20.9, the regional bank said Friday.
The drop was much larger than expected. Economists had expected a negative 6 reading, according to a survey by the Wall Street Journal.
Any reading below zero indicates deteriorating conditions.
This is the third straight reading negative reading for the Empire State index and the fifth in the past six months.
Key details: The index for new orders fell 10.9 points to negative 17.2 in March. This is a sign of softening demand.
The shipments index fell 9.7 points to negative 6.9.
Unfilled orders fell 1.3 points to negative 10.9 in March.
The number of employees and the length of the average workweek both fell deeper into contractionary territory in March.
Prices received increased with prices paid moderated a bit.
Firms continue to expect improvement in conditions over the next six months but optimism is subdued, the New York Fed said.
Big picture: Economists have been expecting a gradual recovery in manufacturing but signs of improvement have been elusive.